Why Gentherm Shares Heated Up

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What: Shares of HVAC systems manufacturer Gentherm were heating up today, gaining as much as 11%, after announcing it will take a major step toward completing its acquisition of W.E.T. Automotive Systems, a German automotive thermal control company.

So what: Gentherm will be acquiring all of the shares owned by W.E.T.'s largest minority shareholder, Deutsche Balaton, whose ownership represented the biggest obstacle toward Gentherm gaining full control of the German company. Gentherm had acquired a majority stake in W.E.T. in May 2011, in order to expand its global reach, and CEO Daniel Coker said today's purchase would help create "synergies."


Now what: Gentherm will issue Deutsche Balaton 3.3 million shares and pay it $7.5 million, the equivalent of $50.9 million based on the agreed upon share price of $13. Shares cooled off a bit after opening higher today, trading about 5% up, but the deal still looks like a smart one for Gentherm, giving it international access and the ability to expand its product range.

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The article Why Gentherm Shares Heated Up originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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